Do celebs influence tax policy?
Clearly most Americans don't have the resources to imitate the fiscal lifestyles of celebrities. While we may not be structuring our finances to be like Donald Trump, the tax lives of celebrities may get us talking ... about tax.
Consider the the little-touted tanning tax. The 10% excise tax on tanning services was included as part of the recent health care reform bill. Even though the tax was given the thumbs up from the American Academy of Dermatology Association (AADA) and the American Medical Association (AMA), it didn't receive much press until reality TV star Snooki had tongues -- and tweets -- wagging.
Snooki, also known as Nicole Polizzi, recently complained about the tax on a promo for her TV show, Jersey Shore. Sen. John McCain responded to Snooki publicly via Twitter and the two got people talking. The tax, which had barely been mentioned in the press, suddenly became a big story. But did it matter? Reportedly, Snooki did actually change her behavior as a result of the tax -- she's moved to spray-on tans. Are thousands of Jersey girls soon to follow?
Sometimes, celebs use taxes as a way of making a statement. Singer Melissa Etheridge made headlines two years ago when she raised the possibility that she might no longer pay tax to the state of California.
She wrote in The Daily Beast that she interpreted the passing of Proposition 8 "to mean I do not have to pay my state taxes because I am not a full citizen." In the piece, she railed against the passing of Proposition 8, which defines marriage in California as between a man and a woman. Since there are not equal rights, she reasoned, there shouldn't be equal tax. She went on to warn the state of California to consider what would happen if the gay community chose not to pay taxes. Etheridge may have gotten people talking (the piece generated 843 comments to date as well as a slew of links) but it's unclear whether she actually followed through on her threats. What is clear is that Proposition 8 remains on the books in California.
Celebrities don't have to talk tax to get other people talking. Sometimes, their actions say more than their words. Tiger Woods made news after his infamous crash not just for his bad behavior but for his finances. The world's top sports brand even now, according to Forbes, pulls in hundreds of millions of dollars in winnings and endorsements. To protect his assets, he reportedly left California for Florida for more favorable tax treatment. While he's subject to state and local taxes earned outside of Florida when he plays in tournaments, his endorsement deals and other income would be subject to the income tax-free rules in the state of Florida.
Similarly, U2 made headlines in 2006 when it was announced that the band was moving a significant portion of its business outside of Ireland, purely for tax reasons. Frontman Bono later defended the move, saying "We pay millions and millions of dollars in tax ... What's actually hypocritical is the idea that then you couldn't use a financial services centre in Holland." What's evident is that even those that didn't agree with Bono's tactics were paying attention. While most taxpayers won't necessarily move simply to save on taxes, the fact that high profile taxpayers do it says that structuring your business or personal life in the most tax advantageous way possible is okay. That's a pretty powerful message.
Some celebs take tax planning a step further, designing their romantic lives around taxes. Just prior to their split, Jenny McCarthy had hinted that she might marry Jim Carrey one day "for tax reasons." Similarly, the eternally young Helen Mirren made news in 1997 when she married U.S. film director Taylor Hackford (An Officer and a Gentleman, Ray) for tax reasons; Mirren had previously vowed to never get married. Even celebs, however, may not be able to resist the financial breaks that might be associated with getting married.
The influence of celebrities in popular culture can't be underestimated. Our hairstyles, clothes, cars, and homes are often reflections of what we see on screen and in magazines. A bigger question may be whether our pocketbooks, wallets, and bank accounts are affected. How far do celebrities go in influencing our financial decisions?